These free-range chickens are getting conventional feed. They lay eggs for Sauder's Quality Eggs in Pennsylvania.

Dan Charles
/ NPR

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Originally published on March 4, 2014 9:26 am

The other morning, I found myself staring at something strange and unfamiliar: empty grocery shelves with the word "eggs" above them. The store, a Whole Foods Market in Washington, D.C., blamed, in another sign, the dearth on "increased demand for organic eggs."

This scene is unfolding in grocery stores across the country. But Whole Foods' sign wasn't telling the whole truth. Demand for organic eggs is indeed increasing, but production is also down.

The reason behind that shortfall highlights an increasingly acute problem in the organic industry.

Most chickens eat feed made from ground-up corn and soybeans, but America's farmers are not growing enough organic corn and soybeans — especially soybeans — to feed the country's organic animals.

It's led to the following situation, which on the face of it seems bizarre. The U.S., a soybean superpower, ships conventional soybeans all over the world to feed animals in places like China. Meanwhile, in China, farmers are growing organic soybeans and sending them here.

The U.S. now gets more than half of its organic soybeans from abroad. The biggest suppliers are China and India.

And the stream of imports is growing. Last year, for the first time, the U.S. imported significant amounts of organic corn, too. This also went for animal feed.

Tight supplies of both commodities, and resulting high feed prices, produced the current egg shortages.

David Bruce, who's director of eggs, meat and produce for the company Organic Valley, says organic feed prices spiked last summer to two or three times above conventional rations.

Eggs were plentiful at the time, as they usually are during summer, so some egg producers decided to shut down their organic production for a while. They got rid of some flocks, and switched others over to conventional feed. The eggs from those flocks still could be sold as "free range" eggs, since all organic chicken houses fit the definition of "free range."

Organic egg production fell, while demand grew faster than expected last fall, leading to today's empty shelves. Organic production is now coming back, Bruce says, but the problem of expensive feed remains.

Clarkson, the grain dealer, says it's difficult to persuade most U.S. farmers to make the switch to organic production. The financial incentives are there, he says. Farmers can sell organic soybeans for twice what they'd get for conventional beans. "This should be almost a no-brainer," Clarkson says. "But it's not."

Farmers say there are a series of obstacles to growing organic soybeans. Allen Williams, a farmer near Cerro Gordo who does grow organic crops, says part of the resistance come from deeply rooted attitudes about farming. "In this area, a good farmer is one who keeps his farm very well maintained, and that means weed-free," he says. "Organic definitely isn't weed-free."

There also are practical reasons. Growing organically can mean more work, clearing weeds by hand. Also, organic soybeans may be profitable, but farmers can't grow organic soybeans on a particular field every year; they'd have too many problems with pests. The crops that they grow in other years, such as wheat, may not bring in as much money.

Finally, U.S. farmers are doing well already. They've been earning record profits growing conventional crops and see no compelling reason to change.

Farmers in China or India, on the other hand, often rely heavily on hand labor for weed control already. Their yields and profits from nonorganic crops aren't as high. So switching to organic is both less difficult and more rewarding.

Many people in the organic industry are unhappy about the situation. Judging by the reaction of Elissa Rubin, shopping for eggs at the Whole Foods, consumers may not like it either. "Wow. They're importing organic feed from those countries? That's amazing," she said. "Seems to go against the grain of helping sustainability and the environment."

Some in the organic industry don't trust the imports. Even though Chinese and Indian farms have to get the same organic certification as American farms, the skeptics think some foreign suppliers may be cheating, selling soybeans that weren't actually grown according to organic rules.

Clarkson, the grain trader, says he does have to be on his guard, "but last year, when the USDA National Organic Program's enforcement folks were looking into this, most of the people who were ejected from the organic world for fraud happened to be good old faithful Americans," he says. "A few happened to be Chinese. No matter where you are, you need to know your chain of supply."

That supply chain, reaching all the way back to certified organic soybean fields in China or India, has become the key to putting organic eggs and chicken meat on America's grocery shelves.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish.

If you've shopped for organic eggs lately, you may have discovered they're hard to find. There's a nationwide shortage, partly because of increasing demand but also because of problems with supply. It's a symptom of some broader problems that affect production of organic eggs and meat.

NPR's Dan Charles explains.

DAN CHARLES, BYLINE: Elissa Rubin came to the grocery store the other morning looking for something simple, a dozen eggs. But at this store, a Whole Foods Market in Washington, D.C., the shelves underneath the big sign that says eggs are completely empty.

ELISSA RUBIN: It is a little unusual, especially when you look around and there are 95 varieties of cereal to choose from.

CHARLES: Rubin usually buys organic eggs, although they cost a dollar or two more.

What would be your guess as to why organic eggs cost more?

RUBIN: I would assume because the chickens are raised on smaller farms, in better conditions that cost the farmers more to produce. Is that not the right answer?

CHARLES: Not quite, Elissa. Let's go to a chicken house.

(SOUNDBITE OF CHICKENS)

CHARLES: This one near Hershey, Pennsylvania, is a free-range operation; the chickens are running around on the floor. Paul Sauder, president of Sauder Eggs, says the house was built so it could produce organic eggs.

PAUL SAUDER: There's doors on the outside of the building.

CHARLES: So the chickens could go outside, as the organic rules require. That's easy. The hard part about going organic is these chickens would need organic feed: ground-up corn and soybeans grown without pesticides or manufactured fertilizer. And that is really expensive.

SAUDER: You go from $400 a ton to over $800 a ton for organic feed. And that's when you really get into some pricey eggs.

CHARLES: That cost eats into his profits. So that's the answer to my question: Organic eggs have to cost more because the chickens get high-priced feed.

At the time I visited this chicken house last summer, organic feed prices were hitting an all-time high. David Bruce, director of Eggs, Meat, and Produce for the company Organic Valley, says some egg producers decided to shut down for a while.

DAVID BRUCE: Take some of their birds out of production, divert them into cage-free because that market was strong, and take them off of the expensive organic feed.

CHARLES: Organic egg production fell but demand kept growing. This is why organic eggs are now so hard to find.

Production is ramping up again, David Bruce says. But a basic problem remains: American farmers are not growing enough organic crops to feed organic animals, especially soybeans. Soybean meal is the main source of protein in chicken feed.

LYNN CLARKSON: We continue to be frustrated finding enough domestic production to meet domestic demand.

CHARLES: That's Lynn Clarkson, a grain trader in Illinois who buys and sells organic soybeans. Clarkson says it's odd because farmers can make a lot of money right now growing organic soybeans. They can sell those beans for twice what they'd get for conventional beans.

CLARKSON: This should be almost a no-brainer - should be but it's not.

CHARLES: Farmers say switching to organic production runs into a bunch of obstacles. Allen Williams, a farmer near Cerro Gordo, Illinois, who does grow organic crops, says it goes against part of farming culture.

ALLEN WILLIAMS: In this area, a good farmer is one who keeps his farms very well-maintained, and that means weed-free. And organic definitely isn't weed-free.

CHARLES: Then there are the practical reasons. Growing organically can mean more work, clearing weeds by hand. And U.S. farmers are doing well already. They've been earning record profits growing conventional crops. They're really good at it. There's no compelling reason to switch. It's led to the following situation: The U.S., a soybean superpower ships conventional soybeans all over the world, to feed animals in places like China. Meanwhile, in China, farmers are growing organic soybeans and sending them here.

The U.S. now gets more than half of its organic soybeans from abroad. The biggest suppliers are China and India. And the stream of organic imports is growing. Last year, for the first time, the U.S. imported significant amounts of organic corn, too, also for animal feed.

All this was news to Elissa Rubin, back in the egg and dairy aisle of Whole Foods.

RUBIN: Wow. They're importing organic feed from those countries? That's amazing. Seems to kind of go against the grain of...

(LAUGHTER)

RUBIN: ...helping sustainability and the environment.

CHARLES: In fact, a lot of people in the organic food industry are not happy about the situation. Some of them don't trust the imports. Even though Chinese and Indian farms have to get the same organic certification as American farms, the skeptics think some foreign suppliers may be cheating, selling soybeans that weren't really grown organically.

Lynn Clarkson, the grain trader, says you do have to be on your guard.

CLARKSON: But last year, when the USADA's National Organic Program enforcement folks were looking into this, most of the people that were ejected from the organic world for fraud happened to be good, old faithful Americans, a few happened to be Chinese. No matter where you are, you need to know your chain of supplies.

CHARLES: And that supply chain, reaching all the way back to certified organic soybean fields in China and India, has become the key to putting organic eggs and chicken meat on American Grocery shelves.